Broking success: John Lumley, Lumley Insurance

▶ How did Lumley Insurance start?

The name Lumley has been in insurance for over 100 years and we sold the old Lumley business in 2003 for £132m.

After 2003 there were a number of us – as a wider family – who were still in insurance. 

Lumley Insurance was born out of Taylor St Aubyn Insurance Services which was a high net worth (HNW) broker run by my brother-in-law Michael St Aubyn. A number of years ago he bought out his partner Michael Taylor but sadly, on the day the sale was finalised my brother-in-law was diagnosed with colon cancer. He died 18 months after diagnosis, 14 years ago, and that was when I stepped into the business. I joined to help run the business for my sister Astrid St Aubyn-Findlay. After five years she agreed to sell the business to my brother Christopher Lumley and myself and we changed the name to Lumley St Aubyn Insurance. 

After that we learned that the people who bought the various Lumley businesses in 2003 had dissolved the name so we went and got our name back and changed the name to Lumley Insurance.

▶ How did the focus on HNW start? 

My brother-in-law used to hunt with his business partner who was a bloodstock broker. They decided to start with their friends, friends of friends and then ultimately through friends, of friends of friends to build up a network of contacts which is the traditional method for a HNW broker to start. 

The people who bought the various Lumley businesses in 2003 had dissolved the name so we went and got our name back and changed the name to Lumley Insurance

▶ What does Lumley specialise in and what are the lucrative lines?

We specialise in high value home and contents with the associated risks such as specialist high end motor, travel insurance, let property, overseas property, commercial property and aircrew insurance. I still have a niche of aviation because I can’t quite escape from it, which is quite lucrative. We also deal with celebrities that are on screen, stage, television and in sport. 

▶ How did you get into your current role and develop the business?

I sat on the board of the family business so had experience of underwriting and broking but no experience of the HNW market. When I started helping out at Taylor St Aubyn I was jokingly referred to as the non-executive managing director – a title that may still be accurate today. I recognised that we had a good little operation which was giving a good service but I wanted to professionalise it.  

▶ What’s changed since you started in the business?

I have got a much larger insurance panel by developing a strong relationship with the majority of the HNW market. Alongside this, I have also been building up the professionalism of the team.

▶ What panel of insurers do you use and what are your thoughts on unrated insurers?

We use Amlin, AIG, Covéa, Beazley, Home & Legacy, Ecclesiastical, Horizon, and Axa Art. With all of those who are not in the direct market we have a growing account with them. 

I feel very uncomfortable about the idea of working with unrated insurers but I appreciate that they have a place in the market for the informed client.

▶ What are the top priorities for the business? 

At the end of the day the clients determine how we drive our business. We try to take what they need and deliver it better than others. To do that we also need to keep our underwriters happy so we strive to deal with them with integrity, professionalism and product knowledge. Finally we are dedicated to our growth. This gives our large underwriter panel another good reason to work with Lumley.

▶ What are your client relationships like and where are your customers based?

Relationships are everything, therefore we employ people who have good connections with underwriters. We want to be the sort of people that people like. We make a big point of trying to visit clients where we can.

They are concentrated in the usual wealth bands of the country. On the aviation side we have clients in this country and also some in the Middle East, Canada, as well as individual clients in Qatar. 

▶ How do you get business? 

The majority of the business is generated by mailshot marketing. We have hypotheses and we test them. There is a huge difference between what we do and what online people do in terms of this. They test and change in a day in the same way that we test and change over months. This has inspired us to do it quicker. 

The FCA renewal disclosure ruling is ridiculous – we have to write to all our clients and recommend to them that they shop around which is a fundamental misunderstanding of a broker’s role

▶ Do have any aspirations to go online?

Yes, we have just renewed our website, we’re just updating our new system that we built, sadly not before SSP went down [Lumley uses SSP]. 

We’re looking to do quotes online. There are no HNW providers of buy-online policies, so we want to be one of the first to make that happen. There is appetite in the mid-sector.

▶ Can you tell me about your challenges with SSP?

We were on SSP after moving from an in-house system on certain expectations that they could replicate our previous models of management information. When they could not deliver this we used our old system. Luckily, we never switched it off so had parallel systems which helped us to stay compliant and maintain service standards to our clients. Our new system will integrate our accounting and management information into one silo and will be launched in phases soon. 

▶ How do you feel about regulation? 

Regulation on balance has been a good thing, but it creates a barrier to entry on competition. The FCA renewal disclosure ruling is ridiculous – we have to write to all our clients and recommend to them that they shop around which is a fundamental misunderstanding of a broker’s role. 

▶ What about the Insurance Act and Brexit, are you affected?

The Insurance Act is not an area that we really feel exposed to. With Brexit, we are aware of the financial climate which our clients live in but insurance tends to be countercyclical. In short, no. 

▶ What are the future growth plans for Lumley?

Our number of staff has grown in the last 14 years from five to 25 people. We have just moved offices within Cirencester – so we are planning an expansion. We have averaged about 16% growth in the last 10 years with an uptick of 23% last year, so we are committed to continual growth. This year has been tough and we are projecting about 10% growth. If the opportunity arose to acquire a business or a book we would take it. 

▶ What are the specific challenges in the market? 

The legal and expense market needs to evolve further, there are more exclusions then inclusions. Travel insurance is another area because HNW individuals will book more expensive holidays, which when they get cancelled will create sums insured which are not necessarily available on the standard market. 

▶ Lastly, congratulations on winning Insurance Age’s HNW Broker award recently. How did you find the competition? 

I found the competition really helpful, we were put up for nomination last year but didn’t win. If we did we would have believed our own bull and gone away complacent. So, when we came back for the award this year we were a much better company, much better prepared. Actually I had developed a degree of cynicism about whether we were going to win, so I was quite surprised.